Scenario: Mike Wants to Buy an Ancient Painting from a Curator

Multiple Choice

Scenario: Mike wants to buy an ancient painting from a curator. Mike values the original painting at $50,000, while he does not have any value for a fake one. However, he cannot differentiate between the original painting and a fake painting.
-Refer to the scenario above.If the curator values the painting at $45,000,which of the following problems is likely to arise?

A) Adverse selection
B) The free-rider problem
C) The paradox of thrift
D) The tragedy of the commons